| Updated: June 13, 2024While there are different types of forex traders, they all share one thing in common – seeking the lowest trading cost to ensure the best value for one’s investments. To help you indicate the brands that offer low-cost forex trading, we have listed 10 of the best retail brokers you can join. All of the brands we have covered are offering account types that enable low-cost trading, with spread-only and commission-based systems often incorporated into the trading model supported by the brands covered below.
Fusion Markets74-89% of retail CFD accounts lose money
IC Markets70.64% of retail investor accounts lose money
FP Markets73.85% of retail investor accounts lose money
Pepperstone75.5% of retail investor accounts lose money
AvaTrade76% of retail investor accounts lose money
Eightcap76.09% of retail investor accounts lose money
IG70% of retail client accounts lose money
XTB80% of retail investor accounts lose money
Interactive Brokers
Tickmill70% of retail investor accounts lose moneyTop 10 Brokers for Low-Cost Forex Trading
When looking for a forex broker that will offer you a competitive price per trade, you can definitely trust Fusion Markets. No matter the type of account one chooses to open, the overall cost of trading is guaranteed to be competitively low. Standard account holders can trade with an average spread of 0.93 on the major currency pair EUR/USD, with no commission charged on trades. Meanwhile, traders who have opened ZERO accounts will benefit from spreads starting as low as 0 pips, with an extremely low commission of $2.25 attached to your forex trades. Traders who cannot receive or pay overnight swaps due to religious beliefs can open a swap-free account and pay no interest while trading major currency pairs with a spread of 1.4 pips.
Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.- 2. Pepperstone
Another broker on our list of low-cost trading brands is Pepperstone, which is a popular website for forex brokers seeking the best value for their investments. With Standard and Razor types of accounts, the broker offers competitive prices for trading numerous currency pairs. The minimum spread on a major currency ticker like EUR/USD is 1.0 pips for Standard traders, with no commission charged for the trade. Meanwhile, if you opt for the Razor-type of account, you will enjoy minimum spreads that start as low as 0.0 pips, with a fixed commission rate of €2.60 charged per side on a single lot. Traders who cannot receive or pay swaps will be able to open swap-free accounts that will offer an average spread of 0.77 pips on major currency pairs and zero commission on trades.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 3. IC Markets
Forex traders are bound to experience one of the most cost-effective trading experiences once they decide to join IC Markets. This broker caters to the preferences of various investors, offering a Standard account as well as a Raw Spread account on both MetaTrader and cTrader. Standard users will trade currency pairs with $0 commission and spreads starting as low as 0.8 pips. Meanwhile, Raw Spread account holders will enjoy tighter spreads that start from 0 pips. The commission charged per side per lot traded is $3.5 for MetaTrader users and $3 for cTrader investors. Traders of the Islamic faith can open swap-free accounts and trade currency pairs with spreads starting from 0.0 pips. While they will not pay or receive swap fees, swap-free account holders will be charged a holding fee for any positions held open overnight.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 4. Tickmill
Tickmill is yet another reputable retail broker that allows competitive prices on forex trades, enabling cost-effective trades for any type of trader. The broker supports two types of accounts – Classic and Raw – with each one of them offering tight spreads and low commission rates. Classic clients will be able to trade currency pairs with spreads starting at 1.6 pips and zero commission deducted during trades. If you choose the Raw account option, you will trade major currency pairs with spreads starting as low as 0.0 pips and a low commission of $3 per side per lot traded. Islamic (swap-free) accounts are also available for traders who cannot pay or receive swap fees. Swap-free accounts can still trade major currency pairs with extremely low spreads and can enjoy up to 6 charge-free days on positions opened overnight.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with Tickmill Europe Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 5. AvaTrade
Seeking low-cost forex trading solutions? You can head to AvaTrade and check the offerings of one of the most reputable brokers in the global forex field. With AvaTrade being compensated through the spread applied to the price of any currency pair, there is no additional charge for making your trades. A major currency pair like EUR/USD has an average spread of 0.9 pips, which offers traders a rather competitive price for their trades. AvaTrade also supports Islamic accounts that allow clients of the broker to trade currency pairs without paying or receiving swap fees. This account offers trades with extremely low spreads on major currency pairs and holding positions open for up to 5 days without incurring any overnight fees.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 6. FP Markets
Forex traders who choose to join FP Markets can trade numerous major, minor, and exotic currency pairs for a very competitive price per trade. Since you can choose between Standard and Raw account options, you can tailor your experience to be extra cost-effective. Standard account users can trade currency pairs with spreads starting at 1.0 pips, with no commission contributing to the fairly low fee paid per trade. Meanwhile, Raw accounts offer spreads as low as 0 pips and a fixed commission of $3 charged per lot traded on each side. Forex traders can also choose to trade 34 currency pairs with the advanced Iress Trader platform, which may incur additional fees for using the innovative instruments and trading tools incorporated into Iress Trader. If your religious beliefs do not allow paying or receiving swap fees, you will be able to open an Islamic (swap-free) account that offers competitively low spreads and commissions on major currency pairs.
10 per quarter for non-AU traders; 20 per quarter and notional volume of AU$1,000,000 per 4 quarters in the last 1 year 73.85% of retail CFD accounts lose money - 7. IG
IG is a trustworthy retail forex broker you can rely on whenever you are looking for cost-effective trading solutions. Those who open a regular IG account will have the opportunity to trade major currency pairs with a spread as low as 0.6 pips and no commission charged per trade. Traders who hold positions open overnight will be subject to an overnight funding charge, which is not a fixed rate fee but is calculated depending on the number of nights a position stays open, the size of the trade, and the tom-next rate. Unfortunately, IG does not offer Islamic (swap-free) accounts for traders who cannot pay or receive swap fees for positions held open overnight.
CFDs are complex instruments. 70% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. Some of the most competitive prices on forex trades can be enjoyed by clients who have opened accounts with Interactive Brokers – one of the best destinations for trading currency pairs. Based on reports from previous years, we can conclude that the average spread offered on the major currency pair EUR/USD is somewhere around 0.62. Combine that with extremely low commissions, and you will see that Interactive Brokers offers its customers some of the most cost-effective trading conditions. The spreads offered by the broker are calculated based on the quotation streams from 17 of the biggest foreign exchange dealers in the world. This often results in spreads starting as low as 0.1 pips.
Investing in financial products involves taking risk. Your investments may increase or decrease in value, and losses may exceed the value of your original investment.- 9. Eightcap
At Eightcap, forex traders can tailor their trading experience to fit their preferences, with the broker offering them cost-effective trading solutions. As a member of this retail broker, you can open a Standard trading account, including one on the TradingView platform, and a Raw account. Standard Eightcap clients will be able to trade major currency pairs with spreads starting as low as 1.0 pips and no commission charged on your trades. Meanwhile, if you have opted for a Raw account, you will be charged a fixed commission of $3.50 per side on every lot traded. That said, the trading cost will be significantly reduced as Raw accounts can trade major currency pairs with spreads starting from 0.0 pips.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.09% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 10. XTB
Another broker that has made our list of low-cost forex brands is XTB, which is a regulated, secure, and fair retail broker that caters to the needs of various investors. With a small surcharge built into the spread and no commission, the standard spread that applies to major currency pairs starts at 0.1 pips. The trading price is further reduced for Pro account users who will be charged a small commission but can benefit from spreads as low as 0.0 pips. For traders who cannot receive or pay swap fees for overnight positions, XTB also offers the option to open an Islamic (swap-free) account.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Comprehensive Comparison of the Top 10 Low Cost Forex Brokers
| Forex Broker | Min Account Balance | Spread | Commission | Inactivity Fees | Funding Fees | Conversion Fees | FX Pairs | Regulators | Platforms | Trust Pilot Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| 1. Fusion Markets | $0 | 0.9 pips Classic; 0.0 pips Zero | $0 Classic Account, $4.50 round turn on Zero Account | No | No | No | Over 200 | ASIC, FSA (Seychelles), VFSC (Vanuatu) | MetaTrader4, MetaTrader5, cTrader, DupliTrade, Fusion+ Copy Trade | 4.8 ⭐ |
| 2. IC Markets | $200 | 0.8 pips Standard, 0.0 pips Raw Accounts | $0 Standard MT; $6 round turn on Raw cTrader; $7 round turn on Raw MT | No | No | No | 61 | FSA (Seychelles), CySEC, ASIC | MetaTrader4, MetaTrader5, cTrader, ZuluTrade | 4.8 ⭐ |
| 3. FP Markets | $50 (AU$100) | 1.0 pips Standard; 0.0 pips Raw | $0 Standard Account; $6 round turn on Pro Account | No | 0.50% to 5.75% on certain withdrawal methods | No | 70+ | ASIC, CySEC, FSA (Seychelles), FSCA | MetaTrader4, MetaTrader5, WebTrader, IRESS | 4.8 ⭐ |
| 4. Pepperstone | $0 | From 0.0 pips (Razor Accounts), 1 pip (Standard Accounts) | $0 (Standard Account), $7 round-turn (Razor Account) | No | No | None on Pepperstone's side | 100 | UK FCA (No.684312), CySEC (No. 388/20), ASIC (No. 414530), BaFin (No.151148), DFSA, CMA | TradingView, MT5, MT4, cTrader | 4.5 ⭐ |
| 5. AvaTrade | $100 | From 0.9 pips (retail), 0.6 pips (pro) | $0 | After 3 consecutive months - $/€/£50 | No | None on AvaTrade's side | 250+ | FFAJ (License No.1574),CySEC (No. 347/17) ISA (No. 514666577), IIROC, ADGM / FSRA (No.190018), CBI (No.C53877), BVIFSC (No. SIBA/L/13/1049), FSCA(No.45984), ASIC(No.406684) | MetaTrader4, MetaTrader5, WebTrader, AvaTadeGO, AvaSocial | 4.5 ⭐ |
| 6. Eightcap | $100 | 0.1 pips on Standard and TradingView Accounts; 0.0 pips Raw Accounts | $0 on Standard and TradingView Accounts; $7 round turn on Raw Accounts | No | Crypto withdrawals attract blockchain fees | No | 50+ | SCB (No. SIA-F220), ASIC (No.391441), CySEC (No. 246/14), FCA (No. 921296) | MT4, MT5, WebTrader, TradingView | 4.3 ⭐ |
| 7. IG | $0 | 0.6 pips CFD trading; 0.165 pips DMA trading | $0 | Yes, varies based on entity | Some withdrawal methods attract fees | 0.50% added to current exchange rate | 80+ | ASIC (No. 515106), FCA (No. 114059), CFTC, DFSA (No. F001780), MAS, BMA | MT4, L2 Dealer, ProRealTime, IG proprietary software | 4.1 ⭐ |
| 8. XTB | $0 | From 0.1 pips (Pro Account), 0.5 pips (Standard Account) | $0 | $/€10 after 12 months | $30 for withdrawals under $50, 1% for Neteller and 2% for Skrill withdrawals | 0.50% added to current exchange rate | 50+ | FCA (License No. FRN 522157), CySEC (License No.169/12), FSC (FSC License No.: 000302/438), IFSC (License No.: 000302/46.), KNF (N/A), CNMV (N/A), BaFin (N/A), FSCA (N/A), FSA (N/A) | xStation 5, xStation Mobile | 3.7 ⭐ |
| 9. Interactive Brokers | $0 | From 0.1 pip | From 0.08 to 0.20 bps x trade size | No | 1 free withdrawal per month ($10 for wire transfer, $4 for checks, $1 for other withdrawal methods) | 0.03% added to exchange rate | 100+ | CFTC, CIRO, FCA, CBI, Central Bank of Hungary, ASIC, SFC (Hong Kong), SEBI, JSDA, MAS | IBKR Desktop, IBKR Trader Workstation, IBKR Mobile, IBKR GlobalTrader | 3.5 ⭐ |
| 10. Tickmill | $100 | From 0.0 pips (Raw Account), 1.6 pips (Classic Account) | $0 on Classic Account; $3 per side on Raw Account | No (archives dormant accounts after 60 days) | No (covers fees on bank transfer withdrawals over $5,000) | No | 62 | CySEC (No. 278/15), FCA (733772), CONSOB (No.4310), BaFin (No.146511), ACPR (No.75473), CNVM (No.4082), FSA Seychelles (SD 008), FSCA (FSP 49464) | MT4, MT5, WebTrader, ZuluTrade | 3.4 ⭐ |
Low-Cost Forex Brokers Pricing Models
To easily pick a broker that will offer you the most budget-friendly trading conditions, we suggest you get familiar with several pricing models that have been adopted by reputable forex brokers. One way to ensure lower trading costs for forex traders is by implementing a spread-only trading system. As the name of this account suggests, the only fee that is attached to your trades is the spread. That means there will be no commission charged, instead, a small surcharge will be built into the spread itself. The spread-only pricing model is a great low-cost solution for forex traders as they will have no hidden fees to worry about while they are trading their preferred currency pairs.
Commission-based pricing is typically considered an even cheaper option than the spread-based model. In many cases, paying a commission-based price is an even more budget-friendly solution than simply opening an account that charges zero commission as traders should focus on the overall price per trade, which includes other factors as well. More often than not, zero commission accounts will include a small fee in the spread, which will increase the end trading price. Meanwhile, a fixed low-rate commission combined with a low spread can offer a much better price.
What Are Spreads and How They Work in Forex Trading
To understand how to evaluate the cost of trading currency pairs, you need to get familiar with the term spread and its significance in forex trading. You will notice that each currency pair will have its buy (bid) price and sell (ask) price, with the difference between the two values indicating the spread, which is a small fee built into the price of trading the said pair. To calculate the spread, you subtract the sell price from the buy price, with the difference in the fourth decimal digits of the two values revealing the spread. For example, a currency pair with a sell price of 0.8553³ and a buy value of 0.8554⁸ will have a 1.5 spread (4.8 – 3.3 = 1.5).
Having a tighter (lower) spread would indicate a smaller surcharge attached to the price of the trade, offering you a better value for your forex trades. Keep in mind, however, that lower spreads may come with other risks like trading higher volumes and higher leverage, ultimately increasing the inherent risk attached to forex trading.
Broker Commissions in Forex Trading
When looking for the best forex broker to offer the most cost-effective trading conditions, often traders are looking for brands that do not charge commissions. However, it is often that lower commission rates combined with tight spreads offer better prices than brokers that do not charge commissions. It is important to spot the different types of commissions you can be charged, helping you to determine when a broker is truly offering a low-cost trading experience to its clients.
Many forex brokers tend to offer different types of accounts that will determine ranging spread values and commission rates for one’s trades. Usually, standard accounts come with higher spreads and low or even no commissions applied to orders. Meanwhile, zero accounts offer tight spreads that can start as low as 0.0 pips, with a certain commission applied to trades. While zero accounts may sound less advantageous to inexperienced traders, it is worth noting that more often than not, zero accounts offer better overall pricing, allowing investors to trade currency pairs at a lower cost.
One of the commissions charged by forex brokers is known as commission per lot or round-turn commission. This type of surcharge is applied to every lot traded, with most brokers considering 100,000 units of the base currency to be equal to 1.0 lot. Let us say the broker where you have opened a trading account charges a $6 commission per lot order. That means you will be charged $3 when entering the trade and another $3 when exiting the trade, which will make the round-turn commission a total of $6. Depending on the broker’s fee policy a commission can be applied on the entire trade, only at the trade entry, or both at the entry and exit. That is why it is important to know how to differentiate between commission types and pick the broker with the most reasonable surcharges.
Other Costs Associated with Forex Trading
In addition to the standard commissions and spreads charged by brokers to conduct your trades, you may also be charged additional fees for using the services of a forex broker. It is important to consider any additional surcharges when comparing brokers as this will allow you to pick the brand that offers the overall lowest cost for trading.
Financing costs are some of the additional charges you should consider when picking a forex broker. Whenever you hold a position overnight, you will either be charged or will receive a rollover fee, also called a financing charge. This is not a fixed rate fee as it fluctuates daily and depends on whether you hold long or short positions. This type of surcharge is calculated thanks to a swap rate, which represents the difference between the interest rates of the two currencies in a pair.
Your realized profits from trading currency pairs may be denominated in a currency different from the base currency you have picked for your trading account. In this case, a currency conversion fee will be charged before the funds are credited to your balance. This type of surcharge is typically following standard commercially adopted rates.
Most retail brokers also charge an inactivity fee if traders have not been active for a duration of 12 consecutive months. This fee is strictly individual for every broker, and it is usually charged on a monthly basis once you have not used your trading account for an entire year. To stay active, you should place a trade or keep an open position during the said period. Simply placing an order without executing a trade usually does not count as an activity.
To be sure of any surcharges that may apply to your trading account, make sure to get familiar with the fee policy of the broker you consider joining. You can also contact the brand’s support team to be sure there will be no hidden fees once you start trading.
Other Factors to Consider When Choosing Low-Cost Forex Brokers
While the cost of trading may be your number one priority when choosing a forex broker, there are many additional factors to consider whenever you are evaluating low-cost brokers. Since you will be risking your real money, you always need to be sure that you will be conducting your trades in a secure and fair trading environment.
One of the first things to check when investigating a forex broker is the brand’s regulator and license issuer. It is always advisable to pick brokers that have been licensed by the official regulator in your respective jurisdiction or select brands that are regulated by top-tier regulatory bodies like ASIC, FCA, CySEC, IIROC, CFTC, and any regulator in the EU and EEA. These authorities keep brokers responsible for ensuring safe trading conditions, insisting on the implementation of tools like investor protection, negative balance protection, segregation of funds, AML practices, etc.
Depending on your experience in trading and the budget you are willing to spend on trading, you may benefit from different types of trading accounts. That is why it is important to check the types of accounts the broker supports, with the demo account option being a great advantage that any trader may appreciate.
Forex traders may also want to consider the range of trading assets available on the broker’s platforms. Some brands offer a limited number of currency pairs that include only major currency tickers and several minor currency pairs. If you are interested in more exotic pairs, you should look for brokers that offer a more extensive range of tradable forex assets. Make sure that the currency pair you wish to trade is not available only to large account holders as some brokers may limit the number of tradable pairs for standard retail customers.
Last but not least, we advise investors to check the availability of any educational instruments and content on the broker’s website. Whether you are new to trading or you have been active in the forex field for quite some time, it is always useful to have easy access to educational materials that can help you improve your trades.
Are There Disadvantages to Trading with Low-Cost Brokers?
Besides the obvious advantage of trading currency pairs at a lower cost, there might be a few hidden disadvantages to choosing low-cost forex brokers. It is advisable to carefully check every type of charge that may be applied to your account before you start trading with low-cost brokers. While many brands offer retail traders to trade currency pairs with zero commission, a small fee is usually built into the spread. Often, zero accounts that offer tighter spreads starting at 0 pips and a small commission offer a better overall price per trade than zero-commission accounts.
Trading with zero commission may sometimes come with higher deposit requirements and additional fees that may increase the overall cost of trading. That is why, traders are advised to carefully calculate the actual price they will pay once they start trading currency pairs with seemingly low-cost forex brokers.